Grain Express 10/31/22
Posted: Oct. 31, 2022, 7:56 a.m.
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Ukraine Grain
Moscow suspended its participation in the Black Sea deal on Saturday, in response to what it called a major Ukrainian drone attack on its fleet in Russian-annexed Crimea. -Reuters
This morning, Reuters reported that there were twelve ships carrying 354,500 tonnes grain left Ukrainian ports on Monday despite Russia having abandoned a U.N.-backed deal to guarantee exports from the war zone, suggesting Moscow had stopped short of reimposing a blockade.
-Reuters
Commitments of Traders (through October 25th)
Corn: Managed Money were net buyers of 10,112 futures/options contracts, bringing their net long position to 264,374.
Soybeans: Managed Money were net buyers of 8,548 futures/options contracts, bringing their net long position to 75,411.
Wheat: Managed Money were net sellers of 14,001 contracts, increasing their net short position to 36,052.
A Look at the Outside Markets
Equity markets are slightly lower this morning, crude oil is down 1.5%, and the U.S. Dollar is steady to firm. There is a Federal Reserve interest rate decision on Wednesday afternoon (1:00pm CT). Expectations are for another 75-basis point hike. Much of that is baked in, the important part will likely come in the press conference (1:30pm CT) where we may get a look at forward guidance.
Corn
Corn futures gaped higher in on the Sunday night open, taking prices back to the top end of the recent risk-range, our resistance pocket, and the psychologically significant $7.00 handle. Today's regular trading hours could be more telling in what the market wants to do from here. The consensus seems to be fade the rally, which was our initial thought too. BUT, if the Bulls can chew through $7.00 with some conviction, we could see an attempt to fill the gap from June 21st, 725 3/4-728 1/4. The gap on the downside comes in from 680 3/4-683 3/4.
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Soybeans
Soybean futures gaped higher Sunday night but have been the "weakest" of the three we cover, which is understandable and expected. The market tagged the 50 and 100-day moving average and took out any stops that were resting just above the October 12th high (1423 1/4). From a risk/reward perspective, it's a decent place to look at the short side. A breakout above resistance would negate that.
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Wheat
Wheat Bulls got the move they needed on the back of headlines from Russia and Ukraine. The markets is back above the 50 and 100-day moving averages. A failure to defend these could take us back to fill the gap. Obviously, price action is going to be sporadic with unpredictable headlines. Possibilities to consider: 1. They are still able to safely move grain out of Ukraine. 2. They are not safely able to move grain out of Ukraine. Our opinion: it's a coin flip. Manage your risk accordingly.
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